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Caleres: A Cheap Play On Good Shoes


  • Caleres has experienced a lot of pain since the pandemic started, but the picture for the business is showing nice signs of improvement.
  • On top of this, shares of the business are quite cheap at this point in time, making it a compelling prospect.
  • Of course, the downside is that this isn't a high-quality play but is, instead, a decent company at a solid price.
  • My assessment of the company would be higher if it weren't for the fact that the company continues to shrink its physical footprint.
  • Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Learn More »

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While the footwear that we place on our feet is often a subject of significant thought due to the impact it has on quality of life and others' perceptions of ourselves, the retailers that specialize in selling footwear

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This article was written by

Daniel Jones profile picture

Daniel is an avid and active professional investor.

He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

High Sharpe profile picture
Nike shop within a shop going in 1/2 of SCVL stores. I think thats the one to own
Thelonius23 profile picture
A lot of their suppliers (Nike, etc) are focusing more on selling direct and bypassing the retail shoe stores. What are your thoughts on that? Foot Locker (another larger retailer) has cratered because of this trend.
@Thelonius23 None of the other shoe manufaturers have such a giant share of the market, 70% in the case of FL.
I just added to my shares in CAL. I think the thing that's holding it back, along with DBI and PLCE among others is that investors are thinking that CAL had record earnings with the gov't helicoptering money to millions of people, and investors aren't sure those kinds of earnings will recur in '22 and '23. I think CAL can do, and it definitely could double in the next 12-18 mos. Paul Price at Real Money has been high on CAL, DBI and PLCE since March of '20, and they've all done well, but not nearly as well as they can in the next year or so.
Closing less profitable/unprofitable locations is a sign of good management. It is not a negative.

Management has already pre-announced expected FY 2021 (ended Jan. 29, 2022) EPS as about $4.05. That is way (+ 83.3%) above the company's old all-time record EPS of $2.21. They are earning much more, with less stores than before.

Caleres is a true growth story at a non-growth, ridiculously cheap valuation. Instead of comparing it to other out-of-favor industry cohorts you should looking at its long-term average P/E (of 13.9x) versus its current multiple.

Do that and CAL's 12- 18 month target price zone goes to $40 - $60.
@stockdoc999.9 From your mouth to God's ear, please!!
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